As bank customers suffered by waiting in long queues to withdraw their money from November onward last year, another group of people — bank employees — endured the hardship of extended work hours and customer anger.
The employees, say bank unions, bore the major brunt of the sudden decision announced on November 8 last year by the Prime Minister. Sanjay Das, Assistant General Secretary of the All India Bank Officers' Confederation, told IANS,
"Banking personnel were rigorously working towards recovery of bad loans before the announcement of demonetisation, but the entire drive of recovery got derailed after the announcement as employees had to work day and night for giving service to depositors."
The bank unions said that of the more than 100 persons, who lost their lives during the demonetisation chaos, were bank employees and officers.
Das said that despite the enormous amount of extra work put in by the employees, very few were compensated. "Over 50 percent of employees and officers are yet to get their compensation for the extra work they did during the demonetisation period," Das said.
According to C.H. Venkatachalam, General Secretary of the All India Bank Employees' Association, the whole experience had left "a big scar in the minds of bankers". He said a million bank employees handling 1,000 million people coming to branches to deposit old notes was certainly a big task.
He said the bankers were abused by the general public for not disbursing new notes and diverting the same to others. "The RBI made matters worse by saying that sufficient number of new notes were disbursed to banks," he added.
He said the bank managements were not bothered about the problems faced by branch officials. The Reserve Bank of India (RBI) also asked bankers to work on Saturdays and Sundays. Officials in the branch were in office till late in the evening. Although some clerical staff, he said, were paid overtime, officers were left out.
Pradip Biswas, General Secretary of the Bank Employees Federation of India, said that not only employees but even the banks had not been reimbursed by the government for the cost incurred on recalibration of ATMs.
Criticising demonetisation, Biswas doubted that the whole exercise was done to unearth black money as claimed by the government. "The annual report of the RBI revealed that Rs 15.28 lakh crore, or 99 percent of Rs 15.44 lakh crore of scrapped notes, came back into the system after demonetisation. Now the question arises: was the demonetisation scheme designed to convert black money into white?" Biswas wondered.
He said the government had described it as a fight against black money, funding of terrorist outfits and counterfeit currency. "But all their claims have fallen flat," he said.
"The scrapping of notes failed miserably in addressing its objective of striking a blow against the black economy. Instead, the side effect of the note ban has impacted the banking industry adversely," said Das, who is also the West Bengal State Secretary for the union.
The massive inflows of bank notes put a strain on the banks' daily operations and banking personnel were not able to focus on credit disbursement, which resulted in potential loss of banks' income, Das said, adding that bank credit growth came down to about 5.1 percent in 2016-17 from an average of 11.72 percent in the previous five years.
The apex bank too has mentioned that banks' preoccupation with exchange of notes and deposits was one the factors for low credit growth. "Credit growth touched a low in more than two decades on account of factors such as subdued state of economic activity, risk aversion of the banking sector... loan repayment by use of specified bank notes (old notes) and banks' pre-occupation with exchange of notes and deposits following demonetisation," said the RBI's latest annual report.
D. Thomas Franco Rajendra Dev, General Secretary of the All India Bank Officers Confederation, said that, initially, they had welcomed the government's move: "But it turned out to be a nightmare for the bankers."
He said people thought bankers were at fault for not disbursing the new notes, but "the RBI supplied new currencies only to private banks daily and not to government-owned banks".
Dev said the government should probe whether new notes found their way into the hands of industrialists and businessmen directly from the currency printing presses.
But some senior bank officers differ with the unions about the impact of demonetisation on the economy in the long run. "Right now people are complaining, but one thing is certain that (huge) money has come into circulation. Banks have accessed low-cost deposits and, subsequently, lenders have reduced the lending rates," said Sanjiv Sharan, Executive Director, Punjab National Bank.
One year down the line, economic conditions would improve, and with the government's thrust on low-cost housing and infrastructure development, credit demand would grow, he added.
"For the time being it may seem that demonetisation is disturbing the economy. But in the long run, it will help it," Sharan contended.